Current Awareness in Aging Research (CAAR) Report #612 -- November 3, 2011

CAAR (Current Awareness in Aging Research) is a weekly email report produced by the Center for Demography of Health and Aging at the University of Wisconsin-Madison that helps researchers keep up to date with the latest developments in the field. For more information, including an archive of back issues and subscription information see:

4. INTEGRATED PUBLIC USE MICRODATA SURVEY (IPUMS) UPDATE: On Nov. 2, 2011, the University of Minnesota IPUMS announced: " Posted new 2010 American Community Survey and Puerto Rican Community Survey data. Together, the 2010 samples contain over three million person records."

5. MEDICAL EXPENDITURE PANEL SURVEY: The US Agency for Healthcare Research and Quality has released several new MEPS data files (August 2011, data in .zip or self decompressing [.exe] ASCII text and SAS Transport format, with documentation in HTML and .pdf format, and SAS and SPSS programming statements in ASCII format).

6. UK Data Archive (Essex University, Colchester, UK) Data Update: The UK Data Archive has recently added the following dataset, which may be of interest to researchers in aging, to its holdings. Note: There may be charges or licensing requirements on holdings of the UK Data Archive. For more information see:

8. US DEPARTMENT OF HEALTH AND HUMAN SERVICES, OFFICE OF THE ASSISTANT SECRETARY FOR PLANNING AND EVALUATION ISSUE BRIEF: "Economic Analysis of the Causes of Drug Shortages" (October 2011, HTML and .pdf format, 19p.).

B. "Review of Medicare Payments Exceeding Charges for Outpatient Services Processed by National Government Services in Jurisdiction 15 for the Period January 1, 2006, Through June 30, 2009 (A-05-10-00016, October 2011, .pdf format, 20p.).

16. AMERICAN GERIATRICS SOCIETY AGING IN THE KNOW STUDY SUMMARY: "Osteoporosis Medication: Good for Bone and Financial Health Summary of this Study," a summary of "Cost-Effectiveness of Oral Bisphosphonates for Osteoporosis at Different Ages and Levels of Life Expectancy," by Annalise N. Pham, Santanu K. Datta, Thomas J. Weber, Louise C. Walter,and Cathleen S. Colon-Emeric (_Journal of the American Geriatrics Society_, Vol. 59, No. 9, September 2011, p. 1642-1649). There is a link to the article at the bottom of the summary.

18. BRANDEIS UNIVERSITY HELLER SCHOOL FOR SOCIAL POLICY AND MANAGEMENT, INSTITUTE ON ASSETS AND SOCIAL POLICY RESEARCH AND POLICY BRIEF: "Rising Economic Insecurity Among Senior Single Women," by Tatjana Meschede, Martha Cronin, Laura Sullivan and Thomas Shapiro (October 2011, .pdf format, 5p.).

32. BOSTON COLLEGE CENTER FOR RETIREMENT RESEARCH: "Do Couples Self-Insure? The Effect of Informal Care on a Couple's Labor Supply," by Norma B. Coe, Meghan Skira, and Courtney Harold Van Houtven (WP#2011-16, October 2011, .pdf format, 33p.). Links to an abstract and full text are available at the site.

In light of the recent concerns regarding the solvency of Social Security's Old-Age, Survivors and Disability Insurance (OASDI), private pensions may play an increasingly important role in retirement welfare of US retirees. However, the private pension landscape has evolved in ways that may result in lower private pension wealth for retirees. One recent such phenomenon involves the conversion of traditional defined benefit pension plans to cash balance plans, which resulted in lower pension benefits for many workers. In this study, I investigate how characteristics of the firm's workforce influenced whether the firm converted their traditional pension plan to a cash balance plan and how these characteristics related to the firm's pension plan policy more generally. Using the Longitudinal Employer-Household Data and pension plan data from the Department of Labor/Internal Revenue Service and the Pension Benefit Guaranty Corporation, I found little evidence of workforce age distribution effects on the likelihood of DB plan conversion to a cash balance plan in the 1990s. More generally, I consistently find positive associations between firms with older and more female workforces and defined contribution plans during the same time.

A. "The Composition and Draw-down of Wealth in Retirement," by James M. Poterba, Steven F. Venti, and David A. Wise (w17536, October 2011, .pdf format, 41p.).

Abstract:

This paper presents evidence on the resources available to households as they enter retirement. It draws heavily on data collected by the Health and Retirement Study and calculates the "potential additional annuity income" that households could purchase, given their holdings of non-annuitized financial assets at the start of retirement. Even if households used all of their financial assets inside and outside personal retirement accounts to purchase a life annuity, only 47 percent of households between the ages of 65 and 69 in 2008 could increase their life-contingent income by more than $5,000 per year. At the upper end of the wealth distribution, however, a substantial number of households could make large annuity purchases. The paper also considers the role of housing equity in the portfolios of retirement-age households, and explores the extent to which households draw down housing equity and financial assets as they age. Many households appear to treat housing equity and non-annuitized financial assets as 'precautionary savings,' tending to draw them down only when they experience a shock such as the death of a spouse or a period of substantial medical outlays. Because home equity is often conserved until very late in life, for many households it may provide some insurance against the risk of living longer than expected.

B. "How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near Retirement Age Population in the Health and Retirement Study?" by Alan L. Gustman, Thomas L. Steinmeier, and Nahid Tabatabai (w17547, October 2011, .pdf format, 65p.).

Abstract:

Study (HRS) to investigate how the recent "Great Recession" has affected the wealth and retirement of those in the population who were just approaching retirement age at the beginning of the recession, a potentially vulnerable segment of the working age population. The retirement wealth held by those ages 53 to 58 before the onset of the recession in 2006 declined by a relatively modest 2.8 percentage points by 2010. In more normal times, their wealth would have increased over these four years. Members of older cohorts accumulated an additional 5 percent of wealth over the same age span. To be sure, a part of their accumulation was the result of the upside of the housing bubble. The wealth holdings of poorer households were least affected by the recession. Relative losses are greatest for those who initially had the highest wealth when the recession began.

The adverse labor market effects of the Great Recession are more modest. Although there is an increase in unemployment, that increase is not mirrored in the rate of flow out of full-time work or partial retirement. All told, the retirement behavior of the Early Boomer cohort looks similar, at least so far, to the behavior observed for members of older cohorts at comparable ages.

Very few in the population nearing retirement age have experienced multiple adverse events. Although most of the loss in wealth is due to a fall in the net value of housing, because very few in this cohort have found their housing wealth under water, and housing is the one asset this cohort is not likely to cash in for another decade or two, there is time for their losses in housing wealth to recover.

35. UNIVERSITY OF MICHIGAN POPULATION STUDIES CENTER: "Consequences of Internal and Cross-Border Migration of Adult Children for their Older Age Parents in Cambodia: A Micro Level Analysis," by Sochanny Hak, Il Oeur, John McAndrew, and John Knodel (PSC Research Report No. 11-745, November 2011, .pdf format, 26p.). Links to an abstract and full text are available at the site.

We assess and analyze the three components of active management (asset allocation, market timing and security selection) in the performance of pension funds. Security selection explains most of the differences in pension fund returns. Large pension funds in our sample on average provide value to their clients after accounting for all investment-related costs, both before and after risk-adjusting: we find an annual alpha of 17 basis points from changes in asset allocation, 27 basis points from market timing, and 45 basis points from security selection. All three active management components exhibit significant liquidity limitations, which are important in all asset classes, including equity and fixed income. Security selection outperformance is largely driven by momentum trading. Accounting for momentum reduces the security selection alpha by about 72 basis points and offsets most of the positive risk-adjusted returns from market timing and asset allocation changes. Larger funds realize economies of scale in their relatively small allocation to private asset classes, like private equity and real estate. However, in equity and fixed income markets they experience substantial liquidity-related diseconomies of scale.

37. INSTITUTE FOR THE STUDY OF LABOR (IZA) [UNIVERSITY OF BONN, GERMANY]:

A. "Age, Life-Satisfaction, and Relative Income: Insights from the UK and Germany," by Felix FitzRoy, Michael A. Nolan, and Max Steinhardt (Discussion Paper No. 6045, October 2011, .pdf format, 25p.). Links to an abstract and full text are available at the site.

B. "Adverse Selection and Incentives in an Early Retirement Program," by Kenneth T. Whelan, Ronald G. Ehrenberg, Kevin F. Hallock, and Ronald L. Seeber (Discussion Paper No. 6055, October 2011, .pdf format, 44p.). Links to an abstract and full text are available at the site.

42. AMEDEO MEDICAL LITERATURE: Note: "AMEDEO has been created to serve the needs of healthcare professionals, including physicians, nurses, pharmacists, administrators, other members of the health professions, and patients and their friends. They can easily access timely, relevant information within their respective fields... All AMEDEO services are free of charge. This policy was made possible thanks to generous unrestricted educational grants provided by AMGEN, Berlex, Eisai, Glaxo Wellcome, Novartis, Pfizer, Roche, and Schering AG."

44. US ADMINISTRATION ON AGING: "Disaster Assistance for State Units on Aging (SUAs) and Title VI Tribal Organizations Impacted by National Disasters Declared by the President" (HHS-2012-AOA-DA-1201, .pdf and Microsoft Word format, 30p., application deadline is Sep. 14, 2012.).

45. US NATIONAL INSTITUTES OF HEALTH: "Academic Research Enhancement Award (Parent R15)" (PA-12-006, reissue of PA-10-070, multiple application deadlines, National Institute on Aging, in conjunction with several other agencies). For more information see:

It is not by muscle, speed, or physical dexterity that great things are achieved, but by reflection, force of character, and judgement; and in these qualities old age is usually not only not poorer, but is even richer